Women-led Startups in India Face Discrimination from Investors?

The inside stories of discrimination with women startup leads in India are chilling and heart-breaking.

Women founders say that they face gender-discrimination from VCs and investors during funding rounds. (Photo: iStockphoto)

It was a cracking idea. The market was ready and she could gauge a customer base. The research was air-tight and she found a team that agreed to work. But, the problem was with her. She was a woman and that matters in the exclusive, harsh, male-dominated world of investors.

More than 800 startups join the Indian ecosystem every year. On an average, three to four startups are registered every day. The figures may be celebratory in nature, but out of this, only 9 percent are led by women.

Sounds unlikely but in the business world, even company heads need to pass a ‘sex-determination test’. Many women founders and startup leads in India accept that they face gender-discrimination from venture capitalists and investors during funding.

Priyanka Agrawal started a venture of her own to prove that women can build a source of income independently. (Photo: Wishberry Screengrab)

Thirty-one-year-old Priyanka Agrawal always wanted to be an entrepreneur.

I had a “keeda” within me to prove to a typical Indian Marwari mindset that women can build a source of income independently through their own ventures. When I decided to start something of my own, the one and only rule I made was to not take help from my dad. 

Priyanka Agrawal, Co-Founder, Wishberry (Crowd-funding platform)

A few months of struggle, market research and re-jigging ideas brought her on track, and she started approaching investors to raise funds.

During our first big round of funding, as we began negotiations one of the angel investors asserted that our valuation should be discounted because the founding team is led by women and may not be very stable. This sounded really odd to me. Surprisingly, another bad experience was with a woman partner of an angel fund. She told us, ‘I wouldn’t think twice before investing in you if you were led by men, but as women, you might leave the venture anytime.’

Priyanka Agrawal, Wishberry

Anisha believes that ‘investor-discrimination’ is a part of every women entrepreneur’s life. (Photo: Anisha Singh)

Mydala, an online shopping deals website founded in 2009 is led by Anisha Singh. Mydala has seen several successful rounds of funding, but not without a few unpleasant instances that Anisha believes are a part of “every women entrepreneur’s life”.

When I started, there were very few ‘dot.com women’. It was difficult for me to find investors. During my first round of funding I was pregnant and there were times when people got extremely skeptical about my plans. Despite my hard pitch, investors would ask how I will manage my time. They wondered if I would come back. This definitely does not happen with men. Nobody ever asks them how would you balance your work-life as a father!

Anisha Singh, Founder, Mydala.com 

Out of 800 new startups founded in India every year only 9% are represented by women (Photo: iStockphoto)

Nasscom Startup Ecosystem Report 2015 highlights that the total funding received by Indian startups in the given year is more than $5 billion. Out of this, the funding received by women-led startups is $0.168 billion. These are startups ‘led by women’ but may have a ‘male co-founder’. Funding figures for the startups founded or led by a ‘women-only’ team would be even more scary.

Prathima Manohar a social entrepreneur and founder of Urban Vision joined the startup community when the euphoria was shaping up. The community was small, well connected and mentors like Nandan Nilekani and Mohan Das Pai (ex-Infosys) were very accessible. But women were rarely seen in these gatherings, almost missing from the community.

Those were the early days, but I work in the infrastructure and real estate sector and there are hardly any women around even today. In board meetings and conferences, there are times when I am the only woman in the leadership group of a hundred people. I often see that if I have a male colleague with me and we are speaking to a vendor, even if I am the boss, the vendor would essentially speak to my junior male colleague. 

Prathima Manohar, Founder, Urban Vision 

Women entrepreneurs believe that young talent needs mentoring, support and an ‘equal’ environment (Photo: Reuters)

If there are less women in the ‘founding teams’, there are even lesser women investors or women venture capitalists.

To fill the gap and let more and more women avail funding for their startups, serial entrepreneur Lathika Pai along with eight other leading business women, founded SonderConnect.

We looked at various models in the US like the Golden Seeds, FemaleFounders fund which promote and mentor women entrepreneurs. We took what was best suited to the Indian scenario and created SonderConnect. All of these funds and platforms help and nurture women entrepreneurs and historically, their returns have been much higher than other investments.

Lathika Pai, Founder, SonderConnect 

Taking a step forward, leading business women in India have formed ‘investor funds for female founders’ (Photo: iStockphoto)

Sarah Nadav a market strategy consultant at Google, who specialises in entrepreneurship and mentorship is one of the leading voices on the internet that profess greater participation of women in the technology, business and startup domains.

Nadav recently wrote a striking blog  on the content site Medium that went viral in the entrepreneur circle. It stresses that:

Getting women to pitch more and better isn’t going to change the dynamic of investors being mainly men, who like to invest in people like themselves. We are setting up an entire generation of motivated women to put themselves “out there” only to be shot down.

Sarah and other successful women start up leads are now beginning to identify the crux of the problem. They feel that it’s time for ‘the next wave’, and the accountability for ‘lack of women in the technology and startup world’ needs to be shifted to men.